Touch the Soil News #750 (feature photo – A Fast Food Employee – CC SA 3.0)
As we’ve always said, the food chain is ripe with insights about ourselves and the economy. The restaurant business is considered part of the larger “hospitality” industry that includes lodging and resorts.
The Bureau of Labor Statistics (BLS) reports that annual employee turnover rates in the restaurants and accommodations sector peaked in 2007 at a whopping 80.7 percent. It is hard to imagine the training and learning challenges of an industry in which almost 81 employees out of a 100 at the beginning of the year will leave for a number of reasons.
The annual employee turnover rate dropped dramatically during the Great Recession to 56.4 percent in 2010. However, over the last six years up to 2016, the annual employee turnover rate climbed steadily each year. The BLS reported that the turnover rate for 2016 had edged up again to a challenging 72.9 percent.
The BLS also reports that the hospitality sector employs an average of 13.7 million people (almost 10 percent of the nation’s total workforce). That means for 2017, the restaurant/hospitality sector will have to hire and train almost 10 million people. Certainly, the seasonality of the industry is a factor, however, the 500,000 seasonal jobs the hospitality sector grows by each summer is only 5 percent of the turnover.
According to the BLS, the annual employee turnover rate for the whole private sector is also a challenging 46.1 percent for 2016.
Below is a short video on challenges restaurants have in achieving food safety and sanitation minimums due to large employee turnovers. Last year, food safety issues almost collapsed one of America’s favorite restaurants – Chipotle.
A 2010 study by Hewitt Associates indicates that it costs 150 percent of an employee’s base salary to replace them. For a full time $9.00 per hour job, it means each turnover can cost as much as $28,500. For restaurant workers, particularly in the fast food industry, the difference between staying and leaving may be as little as $1,000 a year (a 50 cent per hour raise). What seems to be wrong with this picture, particularly when it comes to food safety and economic security?